Powell’s Dovish Tone Sends Bitcoin Rocketing—Traders Cheer While Traditionalists Grumble
Fed Chair Jerome Powell just handed crypto bulls a gift-wrapped volatility spike. Bitcoin surged 8% in under an hour after his ’patient approach’ speech—because nothing says ’risk-on’ like central bankers pretending inflation isn’t their problem anymore.
Market mechanics 101: When the money printer gets a hall pass, digital gold shines. The 24-hour trading volume tells the story—$42B sloshing into BTC pairs as hedgers scrambled.
Meanwhile in TradFi land: Bond traders are still parsing Powell’s word salad for hidden commas while crypto degens front-run the liquidity wave. The irony? This pump relies on the same Fed policies Bitcoin was meant to escape.
$105,014, which spiked from $103,000 to $106,000. As the report was being prepared, Bitcoin was trading above the $105,000 mark, bringing altcoins along in this upward trend. Powell’s remarks underscored the critical role global data plays in decision-making, invigorating risk appetite. During the Asian trading session, transaction volumes notably increased, refreshing investor interest.
ContentsThe Market Cheers Powell’s StatementsPotential Rate Cut Breathes New Life into bitcoin and Altcoins
The Market Cheers Powell’s Statements
At a Federal Reserve event focused on international finance, Powell didn’t directly address interest rates. However, he emphasized inflation’s decline to 2.3% and unemployment stabilizing around 4.2%. Participants inferred from this that the Fed might shift from its “patient tightening” approach to a gradual easing policy. A minor decline in bond yields and a slight weakening of the dollar index further supported this expectation.
Comments from Chicago Fed President Austan Goolsbee, who noted that inflation is decelerating on schedule, alongside Powell’s message, resulted in a forward shift of the anticipated first rate cut from November to September in the futures funding markets. Although CME FedWatch data showed a 95% probability of interest rates remaining unchanged at the June 18 FOMC meeting, the chance of a 25-basis-point easing by the last quarter increased to 55%. Analysts highlighted a cautious optimism, suggesting the Fed might also review its pace of balance sheet reduction.
Potential Rate Cut Breathes New Life into Bitcoin and Altcoins
Following Powell’s comments, Bitcoin gained $3,000 in seconds, reaching $106,700, reversing the weekend’s negative sentiment. Futures contract open positions increased by 8% in 24 hours, with on-chain data indicating that short-term investor costs are concentrated around $96,700. As long as this level is maintained, new record attempts seem likely.
Technically, daily closings above $104,800 confirm the trend’s strength, while analysts highlight the psychological resistance at $110,000. The entry of $620 million into ETFs last week supports buying appetite. If inflation indicators continue to improve before the Fed meeting, surpassing the historical peak around $112,000 will not be surprising. Altcoins may also partake in the rally led by the largest cryptocurrency at this juncture.
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